Bill of Exchange Test - 9

the amount of bill is paid by the drawee to the payee. in this case, P is a payee. hence the amount of bill is paid by N to P.

The amount due has been paid 1 month in advance. The amount of interest will be calculated as follows:

=10000 × 12/100 × 1/12 = Rs.100

Amount payable in cash=1/2 × 400000 = 200000

Amount settled through B/R = 400000 − 200000 = Rs.200000

Total amount=Rs.8000

Cash payment=Rs.4000

Balance amount = 8000 − 4000 = Rs.4000

Interest = 4000 × 12/100 × 3/12 = Rs.120

a promissory note contains a promise to pay the specified amount.

a promissory note is prepared by the debtor i.e the person who has availed the credit.

As per section 5 of the negotiable instrument Act, 1881, a bill of exchange contains an unconditional order to pay.

bill of exchange is drawn by the creditor i.e seller of goods or who granted credit to the person on whom the bill of exchange is drawn.

Date of maturity of bill= 4 April 1994+2 months+3days(days of grace)

                                      = 7 June 1994